Aussie dollar holds falls below 68 US cents

Daily Currency Update

The Australian dollar is slightly weaker this morning when valued against the Greenback. The AUD/USD pair comes under heavy selling pressure on the last day of the week trading below 68 US cents, to a fresh low since January 6 during the mid-European session. Weaker Aussie comes off the back of firming expectations that the Federal Reserve will keep interest rates higher for longer in the wake of stubbornly high inflation continuing to push the US Dollar higher. The AUD also closed below its 200-day moving average, down 1%, ending the week a tic over 67 US cents.
Looking ahead this week and today the Australian Bureau of Statistics will release the quarterly Company Operating Profits. On Tuesday we will see the release of the Current Account which is directly linked to currency demand. A rising surplus indicates that foreigners are buying more of the domestic currency to execute transactions in the country. Also on Tuesday, we will see the release of monthly retail sales figures the primary gauge of consumer spending, which accounts for the majority of overall economic activity. On Wednesday all eyes will be on the Australian Bureau of Statistics Consumer Price Index (CPI) data. Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. Also on Wednesday, we will see the release of the quarterly Gross Domestic Product (GDP) with market expectations of a 0.8% q/q (2.8% y/y) GDP print for Q4 2022. Household spending looks to have remained resilient to rising rates and inflation. In part, this reflects the ongoing recovery in services spending.